Whether you are on the hunt for a new home or you are an investor looking to invest in real estate, condos can be a great choice. This is a type of residential complex in which there are separate units, with each being owned by an individual.
For example, condos are an increasingly popular housing option in all of Canada, particularly in Ontario. Because of this, a record number of 32,000 condo units will be built in the province’s capital city of Toronto in 2023.
However, some condo buyers may have second thoughts about purchasing a unit halfway through the development project. Whether there are construction delays or they decide they want another home, the question arises, “Can you sell a pre-construction condo?”
The short answer is yes, but only through an assignment sale which is when you sell your property. If you want to find out whether selling your condo is a good choice click here to learn about the assigning process through which condos are sold.
In the meantime, here is our five-step guide to selling a pre-construction condo.
Contact the developer
The first step you need to complete is to contact the developer. This is the person who sells pre-construction condos early in the development project so they can finance the rest of the construction. If you decide you want to sell your pre-construction unit, you will need to reach out to the developer to find out whether you are allowed to do so.
Assuming they give you approval, you should get more information about the assignment sale, including whether there are any fees you need to cover or websites and platforms where you are allowed to market your unit.
Advertise your assignment sale
As soon as you get approval from your developer, the next step is to advertise your pre-construction condo. Because you won’t be allowed to market your unit on the MLS (Multiple Listing Service) or other common real estate marketplace websites, it is advised that you hire a realtor to help you with your assignment sale.
It is best that you search for a real estate agent who is an assignment specialist and has experience with selling pre-construction condos. They have the skills and knowledge to advertise your unit properly and will attract the right buyers through effective marketing strategies.
As offers start to come in, your next step is to prepare to negotiate with the ones that suit you the most. This involves reviewing everything with your buyer and discussing any concerns so you can put together an agreement that works for everyone.
If you hire a real estate agent to guide you through the assignment sale, you can ask them for advice on what strategies you should employ, or simply leave the negotiation to them as they will know how to get the best deal that suits you and the prospective buyer.
Look over the deposits
Once you have found your buyer and accepted an offer, your next step is to finalize the agreement by asking the buyer to pay their first deposit. This deposit is usually held in trust in a lawyer’s account or the real estate trust account, and it will be yours once the assignment sale is completed and a deal has been made between you and the buyer.
Also, the buyer needs to pay a second deposit once they get approved by the developer. This simply serves as proof that the assignee is able to finance the purchase.
Hire a lawyer
Because selling any real estate can be a complicated process, it is strongly recommended that you hire a property lawyer to help you along. An experienced real estate lawyer can come especially in handy when you are trying to sell your pre-construction condo, as there are many steps you need to complete to ensure a smooth sale.
Besides this, there is a lot of paperwork involved in assignment sales such as purchase agreements, and other supporting documents which your lawyer needs to review before any deal is closed.
If you have a change of heart and want to sell the condo before taking possession, you should know that this is possible through a process known as assignment sale. To ensure a successful sale, there are a few steps you need to complete, some of which may require the assistance of a lawyer to guide you through them.
For more help, refer to our post and follow the tips for selling a pre-construction condo.